The crowds here are certainly smaller than four years ago but there is still celebration in the air, though it's been interrupted by the realities of the job -- the president got frequent updates about that horrific terror attack in Algeria. Overnight, he put out a statement condemning that in the strongest terms and also said it's a reminder of the extreme threat from Al Qaeda in Northern Africa, one of the many challenges waiting for him at the start of the second term.

(BEGIN VIDEO CLIP)

ASSOCIATE SUPREME COURT JUSTICE SONIA SOTOMAYOR: So help me God.

VICE PRESIDENT JOSEPH BIDEN: So help me God.

(END VIDEO CLIP)

HENRY: Certainly, a lot of pomp and circumstance, one swearing in down, three more to go. Just moments ago, you see Vice President Biden sworn in at his residence, by Supreme Court Sonia Sotomayor. Now, he has joined the commander-in-chief at Arlington National Cemetery. They'll be laying a wreath at the Tomb of the Unknown.

Less than three hours from now, though, it will be the president's turn here at the White House, in the Blue Room. The Constitution says he needs to be sworn in by noon, January 20th and when it falls on a Sunday, that happens here, within the ceremonial swearing-in, happens tomorrow at the Capitol for both the president and vice president.

We are told the president has been through several drafts of the inaugural address tomorrow. It's going to have two big themes, coming together on some big divisive issues, but also a call to action for the American people to stay engaged in the political process. I'm told he is not going to get into policy details there. He's going to save that for his State of the Union Address which comes next month, on Capitol Hill.

You know the president has taken a much more aggressive tone on issues like gun control, immigration reform but there are leftover issues, such as the stubbornly high unemployment, a budget deficit that he promised to cut in half by the end of the first term.

So, certainly, it is a joyous day for the president but reality is going to kick in real fast, Chris.

WALLACE: Ed Henry reporting from the White House -- Ed, thanks for that.

Joining me now is a member of the president's inner circle, senior adviser David Plouffe.

And, David, welcome back to "Fox News Sunday."

DAVID PLOUFFE, OBAMA SENIOR ADVISER: Thanks for having me, Chris.

WALLACE: Before we get to the inauguration and the president's second term, I want to ask you about this terrorist attack in Algeria. What's your latest information on how many Americans were taken hostage, what's the status of those Americans, and, what does the president think of the way the Algerian military handled the situation?

PLOUFFE: Well, we have no additional information to report. The State Department will do that.

I think this is a reminder that countries around the world share a joint threat from these terrorist organizations. It's why we are so active about providing expertise and information and technology, to help them destroy these networks where they exist. And it's a reminder, obviously in Northern Africa and other parts of the world, Al Qaeda and Al Qaeda-affiliated groups remain a threat.

I think we've got to remember, you know, the terrorists deserve all the blame and fault. It's a heinous act and I think we are going to be talking to the Algerian government in the days to come to understand more fully exactly happened here.

WALLACE: Any second thoughts about the way the Algerians handled this? There's a lot of -- not only militant but hostages who were killed.

PLOUFFE: Well, listen, I think we are going to obviously be in contact with them about this but the focus needs to be on the terrorists and, it's a reminder that all across the globe, countries are threatened by terrorists who will use civilians to try and advance their twisted and sick agenda. And I think that that's why this really is an -- it's going to require an international response.

And that's why we are so focused on -- with our counterterrorism partners around the globe, northern Africa and Middle East and elsewhere, in working with, you know, sharing intelligence and technology, expertise, so they can do a good job of destroying the networks before events like this happen.

WALLACE: Let me ask you about that: during the campaign, President Obama often talked about Al Qaeda, as a spent force. But, just this week, when this terrorist action happened, Defense Secretary Panetta talked about Al Qaeda, in a very different way. Let's watch.

LEON PANETTA, DEFENSE SECRETARY: Al Qaeda is still there. They are still a threat. They are a threat in Yemen. They are a threat in Somalia. They are a threat as we speak in Mali.

(END VIDEO CLIPS)

WALLACE: Does the president now recognize that Al Qaeda is not decimated, but is, in fact, resurging in the countries that Leon Panetta talked about? And what is he prepared to do to take them out in Algeria and Libya and across the region?

PLOUFFE: Well, the president also recognizes the threat. Each and every day, he is leading an effort to monitor terrorist activities and to disrupt them.

WALLACE: But why this talk in the campaign that they were decimated?

PLOUFFE: Well, there is no question that the core Al Qaeda leadership, particularly in the Afghanistan and Pakistan region has been decimated. Obviously, you are seeing across the globe groups mushrooming up. And so, that's why what we've done in Yemen and what we've done in northern Africa -- but, again we are going to take the lead where we can, obviously, to do all we can. But we have to partner with our allies, and our counterterrorism partners to make sure they, themselves, have the expertise, technology to disrupt these plots.

So, we're going to have to remain vigilant. It's going to remain a challenge. But I don't think anybody can question that in the last four years, you know, the Al Qaeda leadership has been seriously weakened but the challenges remain.

WALLACE: What will the president say in his inaugural address Monday? What's the path he will lay out for his second term?

PLOUFFE: Well, I want to be careful not to get ahead of him. But I do think he's going to talk about, on tomorrow, how our founding values and visions can still provide us a guiding pathway in a changing world.

He's going to talk about -- our political system doesn't require us to resolve all of our disputes, our political differences. But it does require us to seek common ground when it can and should exist. It's going to make that point very strongly that people here in Washington need to seek common ground.

He's going to talk about how the American people, if they're not engaged in these debates and push in Washington, progress and change won't happen.

And I think it's important, Chris, to look at this and the State of the Union as a package. They're happening within three weeks of each other. So, he's going to lay out his vision for the second term and where America needs to go, tomorrow, and, specifically details and blueprints will be included in the State of the Union.

WALLACE: I think it's fair to say that the president has been more combative, even confrontational with Republicans here in Washington, since his re-election, certainly the way he handled the "fiscal cliff."

And I want to point to a clip of the president and his press conference earlier this week. Take a look.

(BEGIN VIDEO CLIP)

OBAMA: They have suspicions about Social Security. They have suspicions about whether government should make sure that kids in poverty are getting enough to eat.

(END VIDEO CLIP)

WALLACE: Now we learn that the president is taking his campaign organization and transforming it into an issue advocacy group, Organizing for Action. Is it fair to say that the president has given up on the inside game of negotiating here in Washington and is much more interested in bringing outside pressure to bear on the people up on Capitol Hill?

PLOUFFE: Chris, you have to do both and I think that is a lesson from the first four years, you can't do one or the other. And so, I think we're going to continue.

And, listen, the "fiscal cliff" deal you talked about, we have just about every Republican senator who voted for this. You know, we have cut taxes with the Republicans and we've cut spending with the Republicans and Democrats, obviously. We've done a lot of other things. We're going to continue to work with them.

But the American people have to be engaged in this. And, you know, we listen to our campaign supporters. We did thorough research after the election. This is what they want to do.

They want to focus on balanced debt reduction, how to help the middle class, immigration, gun safety, energy. And we want to make sure that out in the country, these debates are not quiet debates in rooms in Washington, exclusively; that there are people out there in the country pushing for action.

WALLACE: But when the president talks in that clip about the Republicans have suspicions about Social Security, they have suspicions about feeding poor kids, that's not true.

PLOUFFE: Listen, Chris --

WALLACE: I mean, they have different ideas about -- in fact, they have different ideas about how to save Social Security. Not suspicions about Social Security.

PLOUFFE: Well, I think again, where common ground does exist on the need to reduce the deficit in a balanced way that's going to help the economy grow, amongst Democrats on the Hill, and, a few Republicans. The barrier to progress here is not, you know, the president. We need to see more Republicans in Congress willing to compromise, even on revenues.

WALLACE: They say they need to see the president willing to compromise on spending cuts and entitlement reform.

PLOUFFE: Well -- let's look at what we offered Speaker Boehner. It's been public. We offered $400 billion in health care savings, $200 billion in additional cuts to domestic spending, over $1 trillion in savings.

PLOUFFE: If you look at where we started the negotiating process with the speaker, we went more than halfway.

(CROSSTALK)

PLOUFFE: I don't know what is.

WALLACE: Is the president -- is the president still willing to adjust the cost of living increase for entitlements? Is he still willing to raise the eligibility age for Medicare? Are those still on the table?

PLOUFFE: Well, you know, I think -- I'm not going to talk about specifics that may be in the package. It's well-reported in the discussions with Speaker Boehner. We were willing to entertain the cost of living adjustment.

But it depends on the overall package. We put over $1 trillion, including the proposal on CPI -- over $1 trillion, in spending cuts. Now, some of the Republicans say they don't want revenue. Speaker Boehner himself said there was $800 million of revenue, simply from closing corporate loopholes and loopholes for the wealthy.

So, surely, there is additional revenue we can get from closing loopholes, not from rates, that was done in the deal at the end of the year. So, if we can have a balanced package where we get revenue from closing loopholes like making or ship jobs overseas, or for energy company subsidies, and spending cuts, tough spending cuts. And as you said, we've got some criticism, as you know from some members of our party.

So, I think the president has shown he's willing to do tough things on entitlement reform, because he believes that we have to reduce the deficit. We also have to preserve these important programs like Medicare and Social Security.

WALLACE: There is a long history of presidents running into trouble in their second term, Reagan and Iran Contra, and Clinton and Monica Lewinsky, Bush with Katrina and the financial melt down. Has President Obama thought about this and how does he hope to avoid what most people seem to think is the single biggest problems the second term, which is variously described as hubris and presidential overreach?

PLOUFFE: Well, I think we have studied history. I think, you know -- by the way, if you look at Ronald Reagan, he accomplished tax reform in his second term. President Clinton made a lot of progress towards the balanced budget. So, there was good second-term accomplishments.

I think of a few things. One is it's not like we're roaming around the White House looking for things to do. We have on immigration, gun safety, measures to help the economy and energy, we've got a pretty stack agenda here. And I think there is urgency in the country for us to address this.

So, we're going to bring the same energy and focus we did to the second term. Obviously, some other administrations got, you know, in trouble with scandals. We avoided that and we hope to continue that.

But I think there's -- those issues and others, education reform, there's just no shortage of things we can do to help the American middle class and the economy. We're going to pursue those with vigor and energy. But sure, we are mindful of it.

I also think you have to stay connected with what you ran on, and you can't bring stuff out of thin air. You know, I think one of the problems with the Social Security privatization effort during the Bush administration was that wasn't really a core thing that he campaigned on.

So, the things we campaigned on, we're going to bring forward in the second term and try and find common ground on.

WALLACE: All right. The time we have left, I want to go through several second term issues with you, and because we are beginning to run out of time. So I want to do a lightning round which I know you love! Quick questions, quick answers.

What does the president think of this new House Republican plan of extending the debt ceiling three months, until April, but clean, except for the fact they want to link it to the idea that both the House and the Senate pass a budget, and if they don't pass a budget, they lose their pay?

PLOUFFE: I think -- we don't think short-term is smart for the economy, two or three months still has uncertainty. We are very pleased to see the Republicans in the House drop their previous position, which was, you know, they were only going to pay the bills, essentially, that they racked up if they've got what they wanted in terms of deep spending cuts in Medicare and other programs. So that's progress.

But what we need to do is, Washington needs to start contributing certainty and help to the economy. And right now, one of the -- if you talk to anybody out in the country --

WALLACE: But you're not going to veto a three-month extension, are you?

PLOUFFE: Well, again, I think that getting some certainty long term debt is better than short-term. But, no, we think that this was progress. I think, listen, we have made progress on the budget. We cut spending, by the way, as you know, in 2011, the Budget Control Act, over $1 trillion. We just signed a tax deal --

WALLACE: But you were kind of forced into that by Republicans.

PLOUFFE: No, we weren't forced into it. As you know, we were sitting around the table with them for a long time to come to that position.

So, the budget -- we cut over $1 trillion in spending. We just had this deal with revenues. So I think that both sides, again, this it comes back to where there is common ground. We should be able to come up with a package and I think we'd all be better served if Congress starts working more in regular order, so we're not careening crisis-to-crisis, deadline to deadline --

(CROSSTALK)

WALLACE: You know, regular order would be passing the budget -- excuse me, sir, but regular order would be passing a budget which the Senate hasn't done since 2009.

PLOUFFE: But my point is we made budget progress. You know, the House passed the budget resolution on '11, which is a Paul Ryan budget which didn't go anywhere and was deeply unpopular.

WALLACE: The key thing?

PLOUFFE: Well, the key thing is on -- if the House Republicans and Senate Republicans are willing to compromise on closing loopholes. They also said they were for them. So, they just need to be consistent with their previous position, and we can come to agreement on the kind of spending cuts we need, kind of entitlement reform we need to do.

Think about that -- there is no reason at some point this year we can't have a fiscal package that not only reduces the debt in the long term, but gives us the ability in the short-term to help the economy.

WALLACE: You've blown up the lightning round, but let's try to get back to it.

This week, the president proposed some of the toughest new gun control measures ever. But when it came to violent games and violent videos, all of the president said is, let's have a study. Why not? Why didn't he challenge his friends in Hollywood, his supporters in Hollywood, clean up your act and knock it off?

PLOUFFE: Well, the president has spoken about this throughout (INAUDIBLE), I mean, he gave --

WALLACE: But he had an opportunity here on this big speech. Why didn't he say to Hollywood, stop the video games?

PLOUFFE: Well, first of all, it starts with parents. We all have to take responsibility for our children. Secondly, the study is really important, because, we can, with scientific background, understand the direct --

WALLACE: You need a study to know that people is sitting there firing --

(CROSSTALK)

PLOUFFE: These movies and video games, obviously, you know, people are surrounded by violence, kids. But let's really look at this and understand --

WALLACE: But the argument is that he is going easy on Hollywood.

PLOUFFE: He's not going easy. I think he's been clear about this.

But let's focus on, everyone is trying to divert from the core issue, which is -- there is a huge consensus in the country, including a vast majority of Republicans, that things like assault weapons, high capacity magazines, universal background checks, making progress on mental health, these are things we should and can do, to help reduce gun violence and, no law or set of laws is going to end violence, obviously, or these episodes.

But, if we can save one life through action, we should take it. And we think there's consensus on Capitol Hill for this. We think we can get the 60 votes in the Senate and 218, it's going to be very, very hard.

WALLACE: Assault weapons?

PLOUFFE: Well, we're going to -- you know, the president put forward a variety of things, assault weapons, high capacity magazines, universal background checks, some mental health, school safety. So, we think there is support for a lot of these things, and we're going to push as hard as we can.

WALLACE: Finally, less and a minute left, most of ObamaCare goes into effect at the end of this year, beginning of next year. States are already having problems putting the exchanges into effect. Insurance companies are having problems. Employers are having problems.

Is there any chance the president will say, let's slow down, let's delay the January 1st, 2014 kick-in of a lot of this stuff, and allow people more time to implement it?

PLOUFFE: No, I think -- no. But I will be -- HHS or Health Department, and Secretary Sebelius has worked with employers and states to be very flexible, to make sure that we're working with them very closely.

WALLACE: But no delay in January 1st, 2014?

PLOUFFE: No, and I think that the implementation of health care, even though it's a legislative victory and accomplishment that happened a while ago, it's still going to be incredibly important, first of all, for the country, but also for this president. We have to implement it smartly. We're going to have to really work very hard to make sure that the promise of health care becomes a reality.

WALLACE: David, I want to thank you for coming in today, as always. And while you are leaving the White House at the end of the week, you're going to be an adviser for this new advocacy group, Organizing for Action. So, you're not done with us yet.

PLOUFFE: Absolutely not!

WALLACE: That's a promise. Thank you.

Up next, a top Republican Senator Roy Blunt, on the president's second-term agenda.

(COMMERCIAL BREAK)

WALLACE: Inaugural pageantry aside, the partisan brawl in Washington will continue. Joining me to discuss the president's agenda for the next four years is a key Republican, Senator Roy Blunt, vice chair of the Republican conference.

And, Senator, welcome back to Fox News Sunday."

SEN. ROY BLUNT, R-MO.: Good to be with you, Chris.

WALLACE: You just heard David Plouffe lay out the president's goals and approach for the next four years. How do you think his new combativeness is going to work?

BLUNT: Well, seems like to me it is a lot like the old combativeness. Remember the president said during the campaign that you can't solve problems from inside Washington. There is only one guy that can actually lead in Washington in a way that can find a solution to big problems and that's the president.

And, I was surprised this week to see him transition his campaign committee into an ongoing campaign-style effort to have an impact on the Washington debate because it doesn't seem to me that the lesson of the first term would be that that work out very well. And, you know, our problems are big but they're not necessarily all that complicated. Everybody has a pretty good sense of what has to happen. And, I'd like to see the president take advantage of the second term, and divided government, a good time to solve big problems to make --

(CROSSTALK)

WALLACE: What about the White House argument, Senator, that you, congressional Republicans, have done everything you can to block his agenda?

BLUNT: I just -- I think the greater historic argument would be that he has not really done much to advance a specific agenda. He speaks in general terms, he likes the executive order approach, a whole lot better than the legislative approach and you really can't get all that far with executive orders. You've got to get -- you've got to legislate and you've got to legislate realistically. You've got to realize you don't control the entire Congress.

It takes three entities to get a bill passed into law and, you've got to come up with something that a Democrat House -- a Democrat Senate and a Republican House, and the White House, can, at the end of the day, be for. Or you just continue to kind of patch things together, in ways that don't come up with real solutions.

WALLACE: Well, you talk about the transitioning -- his campaign machine to an advocacy group. What about the idea that -- of the outside game? He is going to reach out to voters, go over your heads and put pressure on you?

BLUNT: I just don't -- I don't think there's any reason to believe from looking at the last four years that that produces much of a result. It might produce a stalemate. It might get the president re-elected, but he's not running for a third term.

So, we need to forget about the politics of this, I think, and look at what we can do to move the economy forward, look at what we can do to help create private sector jobs, look at what the federal government can do, in the international sense, to protect Americans, at home and abroad. And, I think that takes a cooperative leadership effort with the Congress.

And the president is seen -- at least, I think a couple of times and members of the House and Senate have seen this movie on Lincoln, the recent movie on Lincoln. The lesson of that movie, I think was, when hard things get done, they get done because a president decided he was going to do what was necessary to get them done, and that means you have to realistically look at the world you live in and the Washington you have been given by the American voters to work with.

WALLACE: Well, let's talk about some of the specific items that are going to be on your agenda.

What do you think of the new House Republican plan to pass a short-term extension of the debt limit until April and in the meantime, insist that the Senate pass a budget or all of you lose your pay?

BLUNT: Well, I think all of us losing our pay if we don't pass a budget is the right thing to do. I'm for cutting spending, just passing the budget isn't quite enough, but at least it's a step in the right direction.

If you went to your credit counselor and said, I can't pay my bills, your credit counselor wouldn't say, "Well, that's just easy. We'll just extend your limit." Your credit counselor would say, what are you going to do to try to pay your bills in the future? And a budget is a big step toward doing that.

One of the frustrations I think of the last three years has been, no budget -- for a year, not a single appropriations bill on the Senate floor. And now, another tool comes along, the debt ceiling, which -- we don't use that tool, either. Apparently, we don't use any tool it takes to get our credit situation where it needs to be.

But, passing a budget would be a big moment and I'd like to see us do that.

WALLACE: Well, let's talk about a couple of the tools that you could conceivably use. And that raises the question, when should Republicans make their stand on spending cuts? Some people are saying, do it on March 1st, when the automatic sequestration cuts, $100 billion, for the next year, would kick in and that you use that as an opportunity to demand the spending cuts. Others would say, March 27th, when you run out of money and the government would shut down.

Is there a point, there, that you see, when you think congressional Republicans, House and Senate, could say here's what we're going to demand, serious spending cuts?

BLUNT: Well, I think all three of the points, the two you mentioned and later, either right now, at the end of February or if we kick it forward to the end of April, the debt ceiling itself, they all become moments to talk about spending sequestration, is -- we need to stop spending, we need to reduce spending, but, it would be better if we could figure out how to do that in a targeted way rather than across-the-board way.

The worst way to have spending cuts is just say, we can't -- we can't decide how to cut anything, so we're going to cut everything just a little bit. That's not the right thing to do and hopefully, we can find a better solution to sequestration, in the Armed Services Committee and other places.

WALLACE: Let's talk about another item on the agenda. You have an A-rating from the National Rifle Association. And this week, you accused the president of trying to -- wanting to try to take away our constitutional right when it comes to the right to bear arms.

And Mr. Obama says that he is protecting other rights. Take a look.

(BEGIN VIDEO CLIP)

OBAMA: That most fundamental set of rights to life and liberty and the pursuit of happiness, fundamental rights that were denied to college students at Virginia Tech, and high school students at Columbine, and elementary school students in Newtown. Those rights are at stake. We're responsible.

(END VIDEO CLIP)

WALLACE: Question: can you support a measure that would limit the size of these high-capacity clips that hold 30 rounds or 100 rounds? Can you support a universal background check?

BLUNT: You know, let's see what they come up with in terms of specific proposals. Certainly, at Newtown, you know, what an incredible tragedy for every family involved, for that community. I've got a 2nd grade son. I've got grandchildren about that age. It was -- it was a terrible thing, those families, frankly, will never recover from.

But, let's talk about changes that would have done something about that. So far, I don't see that. You know, Connecticut is the hardest -- one of the hardest places in the country to get a weapon.

But this young man had weapons but what else did the young man have? He had mental problems and he had a history of problems with security officials, as all of the cases the president mentioned did have. But how do we share that information better?

And let's do things that will make a difference here, rather than take one more opportunity to go at an old agenda. We had bans on things for a decade, that didn't seem to make any difference at all, but, during that same decade, our willingness to share information about mental problems, our willingness to share information between security officials and police officials, all declined.

WALLACE: let me ask you about the question, of sharing information. Polls indicate, 90 percent of Americans, 90 percent of Americans don't agree the sun is going to come up tomorrow! Ninety percent agree of Americans agree with the idea of universal background checks. If you have this concern about who is buying the guns and it wouldn't have happened, because the mom bought the gun in Newtown, but what's wrong with the idea of a screen to find out whether or not someone trying to buy a gun under any circumstances has a criminal record, has a mental health problem?

BLUNT: I think we ought to talk about that.

And the one thing I don't think you want to prevent is two guys who live next door from each other and decide they want to trade shotguns while they're talking about going hunting next week. But, let's look at that and see.

We have had proposals before that I voted for in the Congress that didn't get a majority that would have tried to deal with some of the loopholes. I think gun owners are generally for that. But you have to have a proposal that works, that doesn't create the problem of people not able to have the firearms they'd like to have.

You know, the Second Amendment is there and it's part of the Constitution. And you can't just decide you want to avoid the Constitution because you've come up with some reason that the Constitution no longer works. You have to come up with a real proposal, present it to the Congress, and have it done in a realistic way.

You know, the majority leaders, the Democrat majority leader of the Senate, says he doesn't believe gun legislation will be on the Senate floor. So, this is not a Republican versus Democrat thing, this is a -- what can reasonably be done.

And I think we -- this is a moment we can do something about mental health, about information sharing.

BLUNT: Maybe about background checks and other things a well, but it has to be a plan that could possibly work or the president won't get it done.

WALLACE: Excuse me, but we've got about 30 seconds left. I want to ask you one last quick question. You are a member of the Senate Armed Services Committee. Is the opposition to the nomination of Chuck Hagel as secretary of defense, is that opposition beginning to fade?

BLUNT: Well, we saw at least one senator last week make a statement, Senator Schumer, but I notice not a lot of people rallied to join him and say well it's good enough for Schumer, it is good enough for me. I think Chuck Hagel has got questions to answer. One of those questions is going to be why is it the position you held in the past about Iranian sanctions, about our support for Israel, no longer appear to be your positions? I'm going to meet with him this week and, then the committee I'm sure in those hearings, I'll have some questions there, as well. And look forward to the chance to talk to him about what he would do.

He's going to have a lot to say about our national defense for a long time as the secretary of defense, at this time if he becomes the secretary of defense.

WALLACE: Senator Blunt, thank you so much for coming in, always a pleasure to talk to you, sir.

BLUNT: Good to be with you.

WALLACE: Up next, the president takes a combative tone as he begins his second term. We'll ask our panel how this aggressive approach will work in a divided government.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: It has been a busy and productive four years. And I expect the same for the next four years. I intend to carry out the agenda that I campaigned on, an agenda for new jobs, new opportunity, and, new security for the middle class.

(END VIDEO CLIP)

WALLACE: The president, delivering a mission statement for his second term, which officially begins today.

And it is time for our Sunday group, Brit Hume, Fox News senior political analyst; Liz Marlantes of the Christian Science Monitor; Bill Kristol from the Weekly Standard and Fox News political analyst Juan Williams.

So, Brit, what do you expect from the president's second inaugural address and from his at least initial approach to the second term?

BRIT HUME, Fox NEWS SENIOR POLITICAL ANALYST: Well, it will be a surprise to me if the tone that he used in that news conference the other day where he -- as you showed earlier in the broadcast, he cast dispersions on the motivations of some of his political opponents I suspect he won't do that in an inauguration. I went back and looked at some old inauguration speeches from earlier presidents, second inaugurals, and they weren't as full of bringing us together as first ones are but they still tended to be relatively nonpartisan speeches and I think that would be appropriate and my guess is that that is what he'll do. If he doesn't, we will have some real news.

WALLACE: Which we can always hope for.

Liz.

LIZ MARLANTES, CHRISTIAN SCIENCE MONITOR: Yeah, I agree with what Brit said. I think the biggest challenge for Obama in this inauguration speech, is, I look back at his first inauguration speech and one of the lines that I think got a lot of attention was the issue of whether government is too big or too small, it is whether government works. And of course ironically, after, you know, the past four years, I think most Americans now would be far more inclined to answer that no than before.

And so I think the biggest challenge for Obama is actually to give the country a sense that something is going to get done, the dysfunction in Washington isn't hopeless and that he is going to be able to actually even in small ways, change things for the better.

WALLACE: Well, I think it is fair to say, watching the first interview with David Plouffe and the second interview with Roy Blunt, there was talk about common ground but, sure not a lot of specifics.

Bill, one of the interesting developments I thought this, and we talked about it with Plouffe, was the transformation of the president's campaign organization, into an issue advocacy group. Obama for America, OFA, is becoming Organizing for Action, OFA. Now you remember, I remember that Bill -- that rather Ronald Reagan used to say if you can't make them see the light, make them feel the heat. Is that what it is about? And do you think that this president will be as successful as Ronald Reagan was in making guys feel the heat?

BILL KRISTOL, WEEKLY STANDARD: Well, he's entitled to tie. Ronald Reagan was re-elected with 60 percent of the vote, Barack Obama was re-elected with 51 percent of the vote. Barack Obama did not campaign on gun control which he's now -- a top legislature priority of the second term.

WALLACE: In fairness, Newtown happened.

KRISTOL: Newtown happened, but nonetheless, I just think it's hard -- you get re-elected -- this happened with President Bush, George W. Bush, he got re-elected really on war and terror issues and on making the tax cuts permanent. He didn't chose to -- he chose to focus on Social Security reform right out of the box. He had majorities in both houses of congress and got nowhere. I do think President Obama could have some legislative victories, but I'm not sure he's taking the right strategy to get them.

And again, he won 51 percent of the vote. He is not Ronald Reagan.

WALLACE: Juan?

JUAN WILLIAMS, Fox NEWS CONTRIBUTOR: Well, I think -- you know, it is interesting to be around town this weekend. I think much of the kind of great luster and expectation that attended the first inauguration is gone, but the hope and change agenda, and especially as it's embodied in terms of the political campaign apparatus that we're now going to see transformed into pushing agenda issues is still there. And I think a lot of his liberal core base wants to see this president go bold, become more defiant. They see -- they view what Republicans have been doing as obstructionism and trying to expedite President Obama becoming a lame duck and ineffective.

So I think on things like guns, by the way, Bill, I think that that it might be heartfelt. And I think there are lots of Americans, some of the numbers that Chris Wallace cited earlier, who do support some steps in terms of realistic gun control in the country.

But also on immigration, on energy, even on downsizing the Pentagon. I think that will be the president's second term agenda.

WALLACE: We'll talk about guns in the second segment, but I want to talk about debt and the budget and all of that, which right now -- Brit, House Republicans, they have been busy, too, this week. They held a retreat down in Williamsburg. And they came up with a new strategy which is basically to punt on the debt ceiling, not make the fight about the debt ceiling, pass the three-month extension into April and, instead, make their stand either on March 1 when the automatic sequestration, $100 billion in spending cuts takes effect or March 27 when the government runs out of money. Good idea?

HUME: I think so. I think the debt ceiling struggle is probably a loser.

HUME: The public has been convinced I think to some extent by what amounts to false information that flowed out of the White House and other quarters and throughout too much of the media that the failure to raise the debt limit would mean an automatic default on our national debt, which is not true, but nonetheless scary. And I think they didn't want to face that, that they didn't think it ended all that well the last time, and so they've chosen a strategy of trying to use this to get the Senate, indirectly, to pass a budget, which would be -- which would be, kind of, historic, since it hasn't happened in several years, and would at least shift the focus, a little bit, away from themselves.

As for fighting on the continuing resolution to keep the government open or the -- or the sequester, it remains to be seen what strategy, actually -- how they'll actually frame all that. I'll be interested to see that.

WALLACE: You know, Liz, when I was talking with David Plouffe, he made it sound so reasonable. Well, you know, there you heard Republicans are going to have to agree to some of the cuts that they were suggesting, be it loopholes, closing loopholes, limiting deductions, and will agree to spending and entitlement cuts.

Do you buy it?

MARLANTES: I mean, we'll see. It's been -- it's been impossible for them to get there so far. I do think there's been one, kind of, potentially good political outcome for Republicans, out of backing down on the debt ceiling, which is that all of the talk about how crazy that position was and how dangerous it was has, in a weird way, made -- if they go forward and do, sort of, a straightforward government shutdown over the C.R., for example, seemed less...

WALLACE: C.R., the continuing resolution.

MARLANTES: The continuing resolution, right -- seemed less scary, less like a big deal, less, you know, nuclear than what was being discussed before. So in a way they've, kind of, given themselves room to go bigger on some of these things than maybe they would have had before.

WALLACE: And the one interesting thing I think I'd say is that there seemed to be a new realization by the House leadership and some of the House members. You control the House. You control one-half of one-third of the federal government. You can't govern from that position. Anyway, we have to take a break here. When we come back, up in arms over new gun control laws. Will Congress pass the president's tough new plans?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIPS)

OBAMA: Most gun owners agree that we can respect the Second Amendment while keeping an irresponsible, law-breaking few from causing harm on a massive scale. That's what these reforms are designed to do.

DAVID KEENE, PRESIDENT, NATIONAL RIFLE ASSOCIATION: This announcement by the president really was less about protecting our children than it was about using our children to promote an anti-gun agenda, the agenda that he's had for most of his political life.

(END VIDEO CLIPS)

WALLACE: President Obama and the head of the National Rifle Association on whether the administration's new gun control plan violates the second amendment.

And we're back now with the panel. So let's take a look at how the public reacted in a Fox News poll to President Obama's new proposals on gun control. Ninety-one percent support universal background checks for gun sales. Sixty percent favor armed guards in schools; ban high capacity clips, 56 percent; ban assault weapons, 54 percent. Given those numbers, Bill, how much of the president's plan do you expect Congress to pass?

KRISTOL: I think maybe the universal background checks and not much else, honestly. I just think, when they -- the more people look at these other proposals, they'll see that they don't have -- wouldn't have any effect on the mass murders that -- that, as you said earlier, spurred the president to suddenly put gun control at the top of his agenda.

I think none of -- I believe literally nothing in his proposals would have affected anything about Newtown or anything about most of the recent mass murders. Generally speaking, gun violence has gone down in this country in the last 10 years. So gun violence has gone down the current gun control laws. There are fewer homicides.

WALLACE: But not mass murders?

KRISTOL: No, mass murders have gone up, but nothing the president is proposing has really much to do, almost anything to do with mass murders. So...

WALLACE: What would?

KRISTOL: Well, maybe the mental health -- you know, toughening up mental health rules, allowing there to be more exchange of information on that, and maybe not much, honestly, and maybe, actually -- I know everyone ridiculed the NRA for saying this, but maybe actually having armed guards at schools and not having gun-free zones where mass murderers know they can go in and kill people and no one will shoot them.

WALLACE: Well, in fairness, the president does include money for that.

KRISTOL: That will pass after...

(CROSSTALK)

(LAUGHTER)

WALLACE: Juan?

WILLIAMS: Look, the fact is here that the American people are of a mind that reasonable steps can be taken. It is unlikely that you're going to get the assault weapons ban re-imposed. I think that there is great political difficulty there. But things have changed since Newtown, as you pointed out, Chris.

I would say one thing that has changed in this town is that suddenly people, from the social workers to the teachers' unions, you know, the police chiefs, the mayors, Bloomberg in New York, governors like Cuomo, O'Malley in Maryland -- these people are now acting -- I think you've seen some of the conservative Democrats, even, shift their opinion about the possibility of enacting -- so, you know, Bill says, oh, nothing's going to change. And I think in fact that -- most Americans would agree with Bill on that point. Oh, it's -- nothing's ever change because the NRA is so big and powerful. But now people are saying, no, let's try to put in place sharing information among agencies so that, if somebody is mentally incompetent, they don't get a gun. Let's do something about the size of these magazines.

There are steps that can be taken. And when you consider that the president's personal popularity and job approval right now, as he's about to be inaugurated a second time, is up there and Congress is down there with head lice, you think, huh, maybe this guy can get something done.

WALLACE: The White House clearly believes, Brit, that Newtown is something of a tipping point in public attitudes. Should Republicans look for some middle ground on guns just so they are not in a position of saying no to everything?

HUME: Yeah, sure, there are things they could add in. They could add in some measures that perhaps, as Bill suggested, on mental health and -- but I would think that -- I don't think the politics on this issue has changed all that much. This is a dangerous issue and remains a dangerous issue for Democrats.

Juan mentioned the president's approval rating. In our poll, the NRA, the hated NRA, which has -- you know, seems to make very little effort to promote its public -- to have a public relations campaign -- they've been more forceful than charming in much of what the NRA has said -- 56 percent to the president's 51 percent.

Gun owners who fear their guns are going to be taken away are legion. And the thing that the Democrats have to remember is these are single-issue voters. So they may even -- even when they are a minority, they're very dangerous because they may like you on all kinds of things, but if you're wrong with them on guns, they'll vote against you.

WALLACE: Politically dangerous, you want to point out.

HUME: Huh?

WALLACE: Politically dangerous. Politically dangerous.

HUME: Yeah, I don't mean physically dangerous, obviously. But so I think that this -- and I think it may be a mistake for the president to have elevated this issue so high and reached for so much. He may get something, but it won't be all he wanted and it will -- it remains to be seen whether he'll really get anything.

WALLACE: Liz?

MARLANTES: I agree with Juan's point, which is that for the president this is a genuine, heartfelt issue that he is pushing that I think would not have come up if Newtown had not happened, we'd be sitting here talking about immigration reform, is the big new issue.

And, you know, what's interesting about this issue is that for the past decade or so, really it's been the activism that everybody talks about, which is that you see in the polls, right now, a majority is supporting an assault weapons ban, but what we have also seen recently is that the minority that opposes it feels much more strongly than the majority that is in favor of it. The question is whether it is changing. And now that you have this new Obama campaign organization that's going to become an advocacy group and try to motivate that will try to get the other side to really take a position and get active, we'll see.

There is a sense, I think, that the politics are much in flux right now.

WALLACE: The other big story this week, of course was that terrible terrorist attack and hostage-taking at the gas complex in Algeria.

Bill, what is that? And what is the situation in Mali where the French are now in trying to protect the country from an Islamic overrun? What does all that say about the reach of Al Qaeda now, not in Pakistan, not in Afghanistan, but in this new region, in North Africa, and what, if any, policy does the Obama administration have to combat?

KRISTOL: I think the Algerian hostage taking will be what is remembered about this week, not the gun measures and the gun control proposals and maybe not even President Obama's second inaugural address for this reason -- I mean, first of all, Al Qaeda has not dissipated, unfortunately it has found new territory. And the French are going in, to their credit, to try and save Mali. And we are being slow, according to news reports, to even providing backup help for them.

Think about the fact that -- Roy Blunt made this point to me in the green room, so I want to give him credit, he's been in Washington on the armed services committee of the House and the Senate, would it ever have happened in the past that the Algerians would have felt they didn't have to let us know that they were going in on a hostage rescue mission when Americans were held hostage, not just not let us know, why didn't they ask for our help? You know, we do have a lot of assets in intelligence, UAVs, we have a lot of well trained people who could become Algerians for a day if they wanted to got in and help make this a more professional hostage rescue.

We have so retreated from the world, and I think these countries around the world just think that we are not interested, we are not doing much to help the French in Mali. We are pulling out of Afghanistan and when we retreat this is what happens, governments will take things into their own hand and Americans will get taken hostage and they won't even call -- think about that, there are Americans taken hostage and they don't call the U.S. government before going in with armed helicopters.

WALLACE: We got 20 seconds, but I mean, the counter argument to that would be the Algerians fought a long war against the Islamists. They are not going to play Mr. Nice Guy with anybody and they don't want our advice.

KRISTOL: Fine. But in the old days they would have felt they had to call the American president and let him know they are going in if there are American hostages taken.

WALLACE: All right.

Thank you, panel, see you next week.

No Panel Plus because of all the excitement and activity with the inauguration. But, make sure to follow us on Twitter @FoxNewsSunday. Up next, our power player of the week.

(COMMERCIAL BREAK)

WALLACE: For 197 years, American presidents have been making the short trip from the White House a few hundred yards to the corner of 16th and H Streets. And hours before his second inauguration, Barack Obama will make the same journey.

Here's our power player of the week.

(BEGIN VIDEOTAPE)

REV. DR. LUIS LEON, RECTOR, ST. JOHN'S CHURCH: You know you are part of the American history and this is -- from my perspective, it is a celebration of American life.

WALLACE: The Reverend Luis Leon is rector of St. John's Episcopal Church. And he's talking about the tradition of the president attending a worship service there on the morning of his inauguration.

LEON: My hope is that it gives the president an opportunity to -- for a pause, if you will, to have some time with meditation and that the president feels inspired and ready to take this oath, this awesome responsibility that he is about to take in a few hours.

WALLACE: It was Franklin Roosevelt who started the custom. But St. John's, across Lafayette Square from the White House, has been linked to presidents for almost two centuries.

LEON: It has a very special place, because as everyone says, location, location, location...

WALLACE: Who was the first president to worship here.

LEON: James Madison was the first president when the church was finished in 1816.

WALLACE: And how many presidents have worshipped here, since then?

LEON: Every one.

WALLACE: During the civil war, Lincoln used to worship at St. John's on Sunday evenings.

LEON: President Lincoln would come after the service had started, sit in the very back pew of the church.

WALLACE: Right back there.

LEON: Right in the very back of the church. He didn't want to deserve the congregation while they were worshipping, so he came late and he left early.

WALLACE: But Madison sat in the middle of the church in pew 54 and that has become the president's pew.

LEON: When word gets out that the president is coming to worship, you almost feel like the church is going to tilt over on one side because there are so many people are on that one side.

WALLACE: Reverend Leon showed us a book of prayer signed by every president since Hoover.

My gosh, what a piece of American history.

LEON: We pray that you will shower the elected leaders of this land and especially George, our president and Richard, our vice president, with your life-giving spirit...

WALLACE: Reverend Leon gave the invocation at Bush's second inaugural. He will deliver the benediction for Obama tomorrow. And he gave us a preview of his message.

LEON: The benediction is asking for god's blessing which is calling us forth to our better nature. And, you know, my gravest concern about where we find ourselves is that we are not speaking to each other. And, we have broken into camps, and I think that we have more in common than we have -- than that which divides us.

WALLACE: Then he will go back to his normal duties at the church of the presidents. Part of that, he says, is treating the president as just a member of the congregation.

LEON: I think they are here to be reminded they are one of God's children, regardless of what positions they have in life.

WALLACE: But that doesn't mean he can't get a little excited about his special role.

LEON: It keeps you on your toes, this corner of 16th and H street keeps you on your toes, you never know who is going to be in church.

(END VIDEOTAPE)

WALLACE: Reverend Leon was chosen to give the benediction after another pastor bowed out because of what critics call an anti-gay sermon he gave back in the '90s. Reverend Leon has presided over a handful of same sex marriages. He says scripture must be interpreted, because it gives us direction not directions.

And that's it for today. Please stay tuned to this Fox television station and Fox News Channel for complete coverage of President Obama's second inauguration.

Have a great week and we'll see you next "Fox News Sunday."

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